What are the risks when managing banking operations?
Posted: Mon Jan 20, 2025 3:53 am
This specific situation has 5 main risks to which the financial institution is exposed . Check them out:
Credit risk
This is the threat posed by the person or company with whom the bank is operating. It also relates to the capacity of the client carrying out the operation, the possibility of default and the necessary guarantees.
One example was the case of construction companies in 2015. More than 250 filed for bankruptcy protection because the guarantee for access to credit was the contracts made with Petrobras. As the state-owned saudi arabia whatsapp data company refused to make the payments, all the companies defaulted and left more than R$180 billion in credits in the banks.
Market risk
In this case , interest rates, commodities, exchange rates, domestic and foreign markets, among other aspects, must be taken into consideration . This situation is evident in the political crisis that has hit Brazil in recent months.
Corruption situations have led to several crises being experienced by the market, such as demand and unemployment, for example. With the market unbalanced, there are more risks inherent to banking operations.
Operational risk
This aspect covers a range of issues, such as process failures, inadequate staff, lack of qualified labor, outdated systems, etc.
A clear example occurred after Microsoft stopped offering maintenance for Windows XP operating systems. The justification was the software's obsolescence. However, many Brazilian companies still used this OS.
The result? A hacker attack caused data leaks and forced many companies to shut down their servers for 3 days. This situation highlights an operational risk, because many entrepreneurs believe that antivirus software can solve the problem, but these types of fraud occur constantly.
Therefore, operational risk requires a lot of work and commitment to prevent its occurrence.
Liquidity risk
This is a very visible situation in the market. As companies are having difficulty accessing money and keeping their businesses running, they have started to carry out non-existent operations, discounting invoices, among other actions.
The consequence is the formation of a vicious cycle, which can bring great losses to the financial institution . In this case, the bank can – and should – demand guarantees.
Legal risk
The idea here is to adopt good practices, known as compliance. By acting within the law, you will have several benefits. Otherwise, you may face sanctions and fines.
Thus, it is clear that the risk exists, but that it may not happen. Therefore, subjectivity exists and requires analysis to be reduced . This is how losses and problems for the financial institution are avoided.
Credit risk
This is the threat posed by the person or company with whom the bank is operating. It also relates to the capacity of the client carrying out the operation, the possibility of default and the necessary guarantees.
One example was the case of construction companies in 2015. More than 250 filed for bankruptcy protection because the guarantee for access to credit was the contracts made with Petrobras. As the state-owned saudi arabia whatsapp data company refused to make the payments, all the companies defaulted and left more than R$180 billion in credits in the banks.
Market risk
In this case , interest rates, commodities, exchange rates, domestic and foreign markets, among other aspects, must be taken into consideration . This situation is evident in the political crisis that has hit Brazil in recent months.
Corruption situations have led to several crises being experienced by the market, such as demand and unemployment, for example. With the market unbalanced, there are more risks inherent to banking operations.
Operational risk
This aspect covers a range of issues, such as process failures, inadequate staff, lack of qualified labor, outdated systems, etc.
A clear example occurred after Microsoft stopped offering maintenance for Windows XP operating systems. The justification was the software's obsolescence. However, many Brazilian companies still used this OS.
The result? A hacker attack caused data leaks and forced many companies to shut down their servers for 3 days. This situation highlights an operational risk, because many entrepreneurs believe that antivirus software can solve the problem, but these types of fraud occur constantly.
Therefore, operational risk requires a lot of work and commitment to prevent its occurrence.
Liquidity risk
This is a very visible situation in the market. As companies are having difficulty accessing money and keeping their businesses running, they have started to carry out non-existent operations, discounting invoices, among other actions.
The consequence is the formation of a vicious cycle, which can bring great losses to the financial institution . In this case, the bank can – and should – demand guarantees.
Legal risk
The idea here is to adopt good practices, known as compliance. By acting within the law, you will have several benefits. Otherwise, you may face sanctions and fines.
Thus, it is clear that the risk exists, but that it may not happen. Therefore, subjectivity exists and requires analysis to be reduced . This is how losses and problems for the financial institution are avoided.